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02 Council Min 08-23-04 Spec. SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF PARIS August 23, 2004 The City Council of the City of Paris met in special session Monday, August 23, 2004 in the North Hall of the Love Civic Center, 2025 S. Collegiate Drive, Paris, Texas. Mayor Curtis Fendley called the meeting to order with the following Council members present: Jim Bell, Jay Guest, Mary Ann Fisher, Don Wilson, Karen Wilkerson and Rick Poston. Also present were Interim City Manager Terry Townsend, City Attorney Larry W. Schenk and Assistant City Clerk Sherian Dixon. Mayor Fendley opened a question and answer session with Eric Davis, a representative from the Texas Municipal Retirement System. Mayor Fendley asked why, if the employee puts 6% in retirement, wasn’t the City’s matching contribution also 6%. Mr. Davis explained that because the plan is a qualified tax-deferred plan, as well as cash balance type plan, the rate is an actuarially determined number. He explained the rate did three things. First, he said it pays in that month to month match as it accrues; then, the prior service portion is funding the unfunded actuarial liability. He went on to mention that the third item was the supplemental death benefit, which is the TMRS version of life insurance. He said the total rate was made up of these three things. He then explained if the matching ratio is changed, that cost automatically changes also, but the prior service portion may or may not change according to what has been designated, and the supplemental death benefit remains the same. Councilman Bell said he would like a calculation on what the proposed changes would do to the rate percentage. Mr. Davis said for the current 6%, 2 to 1 plan, the 2005 rate would be 12.78%. He said that breaks out into 8.52% for the match, 3.97 % for prior service and .29% for Supplemental Death. He went on to explain that a 6% 1½ to 1 match would be 10.65%, a 6% 1 to 1 match would be 8.52% and a 5% 2 to 1 match would be 11.36%. On a question from Councilman Wilson as to why we were behind, Mr. Davis Special Meeting of the City Council August 23, 2004 Page 2 said that happens when Council mandates something, like a cost of living raise for the retirees, but does not fully funded them on the front end, so the cost is amortized over a 25 year period. Mayor Fendley asked if the updates were done automatically or by contract. Mr. Davis said because the updates had been adopted every year since 1987, the Council adopted an automatic update that became effective January 1, 2003. Mr. Davis explained that the actuarially accrued liability is the cost of all the benefits that have been adopted by the City and that is split into two things, the assets held and the difference between the liability and the assets. He said this is the unfunded actuarial liability. He said this would impact employee benefits by 20% less for the 5% 2 to 1 match, by 25% less for the 6% 1½ to 1 match and by 50% less for the 6% 1 to 1 match. He said the impact would also vary with respect to how long before they retire, such as an employee nearing retirement in the next 2 to 3 years. He said this would affect new hires the most. It was calculated that a 6% 1 to 1 match would equal a total savings of $416,000.00. On a question from Councilman Wilson about the amount of the unfunded liability, Mr. Davis said it was $7,521,827.00. Councilman Wilson stated his concern was that this unfunded liability was automatically renewed every year. He said he felt is this continues to grow, it would put a burden on future employees and future Councils. Mayor Fendley suggested putting this on a future agenda. Mayor Fendley called for consideration of, discussion of, possible action on or direction to staff regarding the position of Interim City Manager. He said he had spoken with outside consulting firms, who would provide that for a fee of $55.00 an hour. Although Mayor Fendley thought that was too much with the recent budget constraints, but Councilwoman Fisher felt that wasn’t too expensive, that the travel expenses are what would make it expensive. It was agreed that the number of hours could be set. There was discussion of in-house Special Meeting of the City Council August 23, 2004 Page 3 versus the consulting service. The possibility of speeding up the process of getting applicants and hiring a new City Manager was also discussed. There was some concern voiced at being too hasty in making a decision about that. It was decided that Mayor Fendley would go back to the firm that provides Interim City Manager and have a report for the Council at the meeting tomorrow. Mayor Fendley reported that Chris Hartung of Waters Consulting Service had 67 applications for the City Manager position. Mr. Hartung said that they would narrow that down to from 6 to 8 candidates and would bring that to the Council in the first week of September. Mayor Fendley said they were looking at an th October 15 hire date. Mayor Fendley called for consideration of, discussion of and possible action on or direction to City Staff regarding the results of the recent salary surveys associated with filling current employee vacancies. He reminded Council that they had requested getting a review of the entry level salaries for positions that were currently open. Public Works Director Terry Townsend said the positions that he had currently that really needed to be filled were four maintenance positions in Water and Sewer. He also said the City Manager’s secretary position was open, as well as a dispatcher in the Police Department, the Water and Sewer superintendent, the Main Street Coordinator and the City Clerk. Mr. Townsend said they really needed to act on the maintenance positions. Mayor Fendley suggested the Council give staff direction on the positions that were imperative to fill now and have staff come back with recommendations on the other positions. Councilman Wilson said on the survey done by the Chamber, the average was $10.34 , but the median wage was $8.50. He felt the wage was also dependent on what that maintenance worker did and what Special Meeting of the City Council August 23, 2004 Page 4 department he worked in. He said they also needed to compare with local industries and contractors. Interim City Manager Townsend said he would try to promote within and then if there was no one qualified, he would go outside. Councilman Wilson suggested setting the entry level pay for a Maintenance 1 worker at $8.00. Councilman Wilson asked if the step pay was going to be kept at 6 month, 1 year, 2 year and 3 year intervals for step raises. Mayor Fendley felt the starting wages should be discussed first and address that issue later, after staff brings back recommendations. Councilman Bell agreed and added that they needed to differentiate in jobs that take different levels of expertise. He said he would agree with the $8.00 per hour for entry level maintenance. On a question from Councilman Poston, Councilman Wilson explained that the average benefit load for the Street Department was $4.81 per hour. A discussion ensued on what different maintenance workers jobs were. Interim City Manager Townsend asked if the M3 and M4 salaries would stay the same. Mayor Fendley said they would have to be lowered also, the entry level positions. Councilman Wilson said this would not effect an existing employees. Interim City Manager Townsend said it would effect existing employees who were applying for a different position or moving up a grade. He indicated it would discourage workers from wanting to move up. Councilman Wilson said the Council was trying to save jobs and keep benefits. Councilman Poston said that using a third party contract service for some of these positions would save the City money because they wouldn’t have to be paying benefits. On a question from Councilman Wilson, Melba Harris, Human Resource Officer, explained that she derived the suggested starting wage from the survey by getting an average, instead of the median, because she felt the average was more reflective of what was going on in the area. Special Meeting of the City Council August 23, 2004 Page 5 Mayor Fendley said the Council needs to give Interim City Manager Townsend and the department heads some direction on this so they can hire people in these critical positions. Councilman Poston suggested that the Council needed to know the benefit load on these positions to get the complete picture. It was agreed to set the Maintenance 1 at $8.00 per hour and the M2, M3 and M4 at percentage increase above that. The Council agreed on $10.33 per hour for entry level dispatcher and $12.00 per hour for the City Manager’s secretary. After discussing the Water and Sewer superintendent, it was decided to set the starting salary at $16.00 per hour. Finance Director Anderson explained that the first step, from Step 1 to Step 2, was a 7 ½ % increase, which happened at 6 months. He said then Step 2 to Step 3 was 2 ½ % at 1 year, Step 3 to Step 4 was 5% in 2 years and Step 4 to Step 5 was 5% in 3 years. After discussing area City Clerk salaries, benefits, and grades, it was decided to set the City Clerk at a Grade 35, Step 1 with a starting salary of $40, 280.00. City Attorney Schenk reminded the Council that all new hires are supposed to come in with the understanding that when they retire, the health insurance will be at their expense. Mayor Fendley gave Ms. Harris a charge to bring back step and grade information for classifications, at least for immediate openings, and eventually for all positions, by mid-September. It was discussed to possibly use temporaries, so there wouldn’t be any rushed decisions made on these positions. Councilman Bell asked of the five firemen that have retired, are they not replacing three of them. Fire Chief Ronnie Grooms said he had asked to fill two of those positions and had gotten the okay from Interim City Manager Townsend. He said they went to the Civil Service Test and got two candidates. Special Meeting of the City Council August 23, 2004 Page 6 He said of the two, only one passed the Physical Agility Test and they could not send him to school to get certified until November. Chief Grooms said right now, the process is on hold and he needed the release to go ahead. Mayor Fendley said the Council wanted him to go ahead on those two positions. Mayor Fendley called for a break at 8:25 p.m. Mayor Fendley reconvened the special session at 8:35 p.m. Councilman Guest did not return after the break. Mayor Fendley called for consideration, discussion and possible action on the 2004-2005 proposed City Budget. Finance Director Anderson came forward and explained that the Special Revenue Fund was money that could only be spent on certain things according to State law, on as needed basis. On the Think Child Safety Program, Mr. Anderson said it was money collected through donations or the Think Child Safety Golf tournament to use for promotional type activities. He said this was revenue neutral. Mr. Anderson explained that the CDJ Grant and Block Grant was just like the Think Child Safety, the money was in and out. Mayor Fendley said the budget number for PEDC needed to be clarified. Mayor Fendley suggested going back through the budget and asking any questions and getting any needed clarifications. Mayor Fendley asked if the Resolution for the Library Fee would be on the September meeting. City Attorney Schenk said it would. Mr. Anderson related that the Appraisal District had given him a new, certified Tax Roll and because of that, the City lost $86,935.00 because of that Special Meeting of the City Council August 23, 2004 Page 7 adjustment. He said the recalculation for the Lamar County Ambulance contract was a gain of $6,274.00. He said the net fees for EMS collections were increased by $50,000.00. He said that made a net decrease in the General Revenue of $30,661.00. He called the Council’s attention to a sheet containing all the changes the Council had made to the budget. Councilman Wilson said the Council had only lowered the budget by $47,000.00. Mr. Anderson agreed. Mr. Anderson said he budgeted the disputed franchise fees at the worse case scenario, so that if the City negotiated that and gained on it, it would be an addition to the revenue. Councilman Bell asked where the sales tax that is collected on cell phone bills going and wondered if the City of Paris was getting any of this. City Attorney Schenk said the Texas Legislature had locked the Franchise fees into a flat rate, so even when the sales tax increases, it doesn’t mean that the City will get that increase. Councilman Bell said he wanted to wait until the end of the budget to discuss health and retirement benefits. Mr. Anderson said the revenue in this budget exceeds expenditures by $205,000.00, which represents a 1% cushion. He reminded the Council that the $150,000.00 Continency Fund was already included on the expense side. On a question from the Council, Anthony Bethel, Director of the Health Department, said the Health Department is getting approximately $70,000.00 revenue from fees. He stated that they see very few medicare/medicaid patients. On the Council budget, Councilman Wilson felt that some of the charitable organizations should be supported at some level, because they benefit the City. Councilman Bell reminded them that Children’s Advocacy Center directly Special Meeting of the City Council August 23, 2004 Page 8 benefitted the Police Department, but he felt that some they added last year could be cut out. Mayor Fendley said this was the taxpayers money and the taxpayers could contribute through United Way. Councilman Poston asked for a list of charitable requests and what was done by the City last year. On Municipal Court, there was an additional court clerk requested and that was left out of the budget. Mayor Fendley said they would discuss contracting that out in October. For the City Clerk budget, the personnel cost changed and the car allowance was deleted. In the Police Department, Chief Karl Louis asked if he could fill the three patrolmen positions that are vacant. Since it was already in the budget, he said it wouldn’t affect the budget. Chief Louis ask for the authority to appoint an Assistant Chief. City Attorney Schenk said in order for Chief Louis to appoint the Assistant Chief, the Council would have to give him that authority. He said the Civil Service gave the option of either appointing an Assistant Chief or testing for one. Mayor Fendley said this would be brought back to the September meeting. Chief Louis said he would like to reiterate the original requests of keeping the rule of 80 and a 5% pay increase, as the budget allowed. Fire Chief Ronnie Grooms gave handouts to the Council for the Fire Department Budget. He first explained the components that went into overtime, Automatic Overtime, Sick Leave, Injury Leave and Training. He said the rest of the overtime represented what he had to use to maintain minimum staffing. Councilman Bell asked Chief Grooms how he could get the overtime under control. Chief Grooms explained that keeping minimum staffing dictates a lot of the overtime, but he had encouraged his employees to use sick leave only when necessary. Special Meeting of the City Council August 23, 2004 Page 9 Several Council members questioned if the sick and injury leave in the Fire Department was more than in other City departments and asked for statistics on that to be brought back to the Council. Councilwoman Wilkerson asked Chief Grooms if he felt the wellness program would lessen sick and injury leave. He agreed it would. On questions from Council, Chief Grooms explained the procedure when his employee called in sick. Chief Grooms called the Council’s attention to the current Mutual Aid Policy he had included in his handout. He said the Department’s goal was to help with other cities and entities whenever possible. Councilman Wilson said h e felt that, eventually, the department would have to depend on some volunteers. Chief Grooms said the problem with that was that not all volunteers are certified. Councilman Bell asked if other Fire Departments were invited to our training. Chief Grooms said that they were invited to some of the training, but that would not certify them. Councilman Wilson said the City could not continue to raise taxes because they were already so high and needed to look to other avenues for keeping the level of service. There was a discussion of the area of service for the City of Paris Fire Department. Chief Grooms explained the general rule was that the City of Paris Fire Department took care of anything in the City limits, except the rescue trucks also went into the County. Councilman Wilson said there needs to be a spirit if cooperation between the City of Paris and other Fire Departments and Chief Grooms needed to look into using some volunteers. On a request from Council, Chief Grooms said his department did some research regarding billing for some Fire Department services. He said some departments are charging for some of their services and there are two companies that handling billing for these services. He said the Council would Special Meeting of the City Council August 23, 2004 Page 10 have to set out the parameters for billing in a Resolution. He said the companies that bill take a percentage of whatever they recoup. He felt billing for some services was a viable option. Councilman Bell asked that this be a future agenda item. Chief Grooms said some Fire Departments charge for all their services and some just billed for those with insurance. Councilman Wilson said he did not feel the citizens of Paris needed to get a bill. Chief Grooms agreed that the insurance companies should be targeted, not the citizens. Mayor Fendley asked if there needed to be some revenue figures in the budget for this. Finance Director Anderson said the first year would only be a guess. It was agreed to bring this back to Council in October. Chief Grooms reminded the Council that he was asked to find out the impact of possibly closing Fire Station No. 4 on Jefferson Road. He gave them the approximate costs of all supplies, services and personnel for one year. He said that closing a station would possibly make the ISO rating increase from a PPC3 to a PPC4, which would increase insurance rates for homeowners and commercial property. He said it would also increase response times, because fewer stations would have to be responding to more calls in a larger area. He also cited increased risk to personnel, increased risk to citizens, low morale for employees, a negative image for the City of Paris and a negative impact on commercial/industrial relocation to Paris as some of the negative impact of closing a station. After further discussion, it was decided that to leave it as is. On the question of using a certified only entrance exam, City Attorney Schenk said he reviewed the Civil Service law and felt to do this wouldn’t be consistent with the way the law is written. He said with Civil Service, they also could not use part-time paid employees. Councilman Bell asked how some other cities were doing this. Councilman Wilson asked if this would also apply to volunteers. City Attorney Schenk said it would not. Special Meeting of the City Council August 23, 2004 Page 11 Chief Grooms said he would research the cost of using, equipping and training volunteers. Councilman Wilson said volunteers could greatly reduce the amount of overtime in the department, which would mean more money could be used for benefits. th Mayor Fendley reminded the Council of the meeting on Tuesday, August 24 at 5 p.m. with the Architects for the new Police Facility, followed by budget hearings. He said there was also a budget meeting scheduled for Thursday, th August 26. It was decided to set a date for the public hearings on the budget th as September 14. Councilman Wilson asked for a report at the next meeting by City Attorney Schenk on how Certificates of Obligation can be issued without voter approval. It was decided to add taking the TMRS off of automatic renewal to the September agenda. There being no further business, the meeting adjourned. ___________________________________ CURTIS FENDLEY, MAYOR APPROVED AS TO FORM: __________________________________ SHERIAN DIXON, ASST. CITY CLERK Special Meeting of the City Council August 23, 2004 Page 12